It's Brexit's hot topic and talks continue today in Brussels 26 March
No transition deal without an Irish border deal and that's far from settled despite all the back-slapping last week at the EU summit that helped GBP find some love again.
Today's negotiations will cover customs, food safety, animal health and the regulation of other goods. Both the UK and EU agree there should be no hard border, but there's key differences on how to achieve that goal. More talks will take place next month with EU leaders due to assess progress at their next summit in June.
Last December the EU and UK agreed that the border could be kept "frictionless" in three possible ways:
- A comprehensive trade deal
- A special arrangement for Northern Ireland which could involve technology or unique customs arrangements
- A "backstop" which could mean NI or UK as whole continuing to follow many EU rules
In February, the EU proposed the backstop which would mean Northern Ireland (part of the UK and hence due to leave the EU) staying in the customs union or single market if there is no other way to maintain a soft border. Yesterday UK Brexit minister Davis says UK and EU have differences on what the backstop plan really would mean.
Lest we forget that there is more work to be done and we should expect some more rhetoric/hot air to waft out across the wires.
Meanwhile GBPUSD 1.4191 still underpinned as USD supply prevails with USDJPY once again below 105.00 and USDCHF down to 0.9458.
